Oil surges past $120 as Iran conflict disrupts Gulf shipments

Oil markets experienced their sharpest volatility in years as the US-Israeli conflict with Iran entered its tenth day, with Brent crude briefly touching $114.3 per barrel before settling at $105.63 by mid-morning Monday. The spike, representing a nearly 15 percent increase, marks the highest price levels since the early months of the Russia-Ukraine war. West Texas Intermediate crude similarly climbed to $101.81 per barrel as traders priced in growing risks to global supplies from the widening regional confrontation.

Hormuz disruptions and Iraqi production collapse

The price surge stems from mounting threats to energy shipments through the Strait of Hormuz, a critical chokepoint through which about 20 percent of global oil passes. Iranian retaliatory strikes have targeted facilities across Gulf states, while Iraq's oil production has plummeted approximately 60 percent, falling from 3.3 million barrels per day to just 1.3 million, according to Kazim Abdulhasan Karim, assistant general manager at Iraq's Field and Licensing Affairs Company. A drone attack on the Bercisiye oil zone in Basra province damaged storage depots operated by foreign firms, though production facilities remained unaffected. Iraq had already announced reduced output following the closure of Hormuz shipping lanes on March 3.

Iran warns of broader energy disruption

Iranian Parliament Speaker Mohammad Bagher Ghalibaf delivered a stark warning regarding the conflict's impact on energy markets, stating: "Trump said oil prices wouldn't rise much, but they have increased, and now he claims a correction is coming. If the war continues like this, there will be no way to sell or produce oil." Ghalibaf added that Israeli Prime Minister Benjamin Netanyahu's "illusions" are destroying not only American interests but those of regional and global nations. Technical analysts identify $119.73 as a resistance level for Brent, with support at $95.82.

G7 considers reserve releases as Trump defends spike

In response to the price shock, G7 finance ministers are scheduled to discuss coordinated releases from strategic petroleum reserves in coordination with the International Energy Agency during a Monday conference call, according to Financial Times. US Senate Democratic Leader Chuck Schumer has urged President Trump to immediately tap the Strategic Petroleum Reserve to stabilize markets and shield American families from price shocks. Trump, however, defended the price increases on Truth Social, characterizing them as "a very small price" for global security and peace, arguing that once the Iranian nuclear threat is eliminated, prices will rapidly decline. For energy-importing nations like Türkiye, the combination of elevated prices and supply uncertainty presents significant economic challenges as the conflict shows no signs of abating.